The government is finalizing a ₹1 lakh crore fund to encourage private sector investment in core research and development (R&D).
The fund will primarily offer low-interest, long-term loans to private companies for developing new products and intellectual property.
Universities and academic institutes cannot directly use the funds, but private companies may involve them in technology development.
This fund is similar to a huge Production Linked Incentive (PLI) scheme for R&D.
India's R&D investment is currently less than 1% of GDP, while countries like the U.S. and China spend 1.5%-3%.
The private sector in India contributes 30%-36% to R&D, much lower than the 75%-77% in the U.S. and China.
Finance Minister Nirmala Sitharaman announced this fund in February 2024, with ₹20,000 crore allocated to the Department of Science and Technology (DST).
The fund will likely be administered by the newly created Anusandhan National Research Foundation (ANRF).
The loans will have nearly zero percent interest, but the private sector must demonstrate that the research will lead to a commercial product.
Loans will not be granted for basic or theoretical research, but for projects with potential commercial value.
The fund is sector agnostic and will cover areas like space, pharmaceuticals, automotive, and energy but not service industries like IT.
The ANRF aims to establish a ₹50,000-crore corpus, with ₹36,000 crore expected from non-government sources.
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